CarolinaLiving Enews for your market.
Welcome to the inaugural edition of CarolinaLiving.com COMPASS Enews. We sort through local, regional and national press every day and will be sharing especially useful bits with you. While we’re realists in these tough times, we know the press loves bad news … when they bleed, they lead - they being the newsmakers in the press.
We don’t shy away from bad news, but dive deep to make sense of it for experts marketing Carolina communities and visitor destinations. We’ve heard many families say they want to visit and move, but can’t until they sell behemoth homes in New Hampshire, Long Island or Ohio. But the deals are here and now.
So, let’s get creative. What’s on the horizon, and how does it affect you and your enterprise? Here’s what our sources say:
* Dr. David Bronner,
Commercial Real Estate Edited from a speech given in Birmingham on Jan. 30, 2009
Thank you for the opportunity to address this group of respected real estate professionals. Keep in mind that I am an investor in many financial products. If you feel that I am “way off base,” please feel free to laugh out loudly. Although RSA allocations to real estate are currently 9.8%, it is not from extraordinary building or buying, but due to losses in the world-wide stock markets.
Today, I would like to lay the groundwork by pointing out what I feel as an investor is important to keep in mind about the world’s hot spots and our current U.S. economy. Finally, I will specifically address the five different segments of real estate on the national and state level.
Five world “Hot Spots” which will affect commercial real estate:
#1 Pakistan
Neither Iraq, nor Afghanistan, nor Iran poses a bigger threat to the U.S. than Pakistan. They have an inexperienced new government, lots of extremists, and probably the most unstable security of nuclear warheads in the world.
#2 Mexico
Most of us feel strongly about illegal immigration. Drug cartels have caused over 5,000 deaths this past year. A collapse of oil prices could make the country very unstable because 40% of the total budget is derived from oil.
#3 North Korea
North Korea will be an early challenge for President Obama, along with Iraq, Afghanistan and Iran. Keep in mind, Afghanistan is the opium capital of the world with over 50% of its GDP coming from drugs.
#4 Russia
Russia wants its position back as a world power. It wants the price of oil much higher. It fully intends to claim the Arctic, which will put it in direct conflict with Canada and the U.S.
#5 Nigeria
Its oil industry is very corrupt and very violent. Add to it the Middle East with the threats against Israel.
Our Economy...and more on Worries,
Positives, Commercial Real Estate
and Dr. Bronner Conclusions...
Read more...
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Willis Williams, Evergreen Investment Partners in Manhattan, developing the Preserve at Wolf Laurel shares …
“I’ve been spending a lot of time looking at the real estate industry and opportunities that exist in these challenging economic times. Several points come to mind:
1. It is well accepted that large pools of capital have been established for the purpose of investing in a variety of distressed real estate assets.
2. Generally, these pools do not possess local knowledge or have a presence in the Southeast.
3. Many developers do not know how to reach these new capital sources.
4. Some distressed developments are or can be good projects that warrant additional investment.
5. Some distressed developments were ill conceived and should not be funded.
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*
Insight from John Myers,President, Wakefield Development.
“In looking at the past 28 yrs (just arbitrarily decided to go back to 1980) the current combination of median income, median home price and 30 yr fixed interest rates, create the most favorable home buying opportunity that we have seen by far in that 28 year span.”
It also indicates that the current median home price represents less than 80% of what a homebuyer could afford, based on monthly payments whereas, the median price over the past 28 years has been that people have been at 130-140% affordability.”
All of this speaks to the unprecedented opportunity for today’s home buyer. This analysis could probably be expanded to include other factors which would influence affordability such as current levels of other debt per household (credit cards, auto, etc), utilities, insurance and other necessities, etc. But, I doubt these would vary nearly enough to offset the favorable positioning of the income, price and rate elements.”
All of this should bode well for home sales (both new and resale) in 2009 although, certainly the rising unemployment and continued economic uncertainty across the country will have a dampening effect.
”
In addition, I don’t know what you are hearing about getting loans but, the word I am getting thru mortgage lenders and major builders is that the money is out there. And while it is tougher for a buyer to get financed than in years past, it is really just a return to prudent banking practices and not unreasonable.”
Note: Email Pat Mason at pmason@carolinaliving.com for the Wakefield/NAHB income, price and rate chart.
Pat Mason pmason@carolinaliving.com
FromForbes.com, “Our country is full of optimists…whether innate or learned, Americans are some of the most hopeful people in the world…Ronald T. Wilcox, Darden School professor of business administration, University of Virginia.
Opportunity is knocking! SmartMoney.com says: “For those with the stomach, some stocks look tantalizingly cheap.” From where we sit, ditto on Carolina real estate. There are fabulous homes for sale at prices you won’t see again. Check out the mountains, foothills, coast, and in the midlands. Traditional resort areas and out-of-the-way rural retreats.
Close to home…the SC Department of Commerce continues to shatter records for job and capital investment recruiting through 2008. Thousands of new jobs … billions in capital investment…urban and rural. Check it out, entrepreneurs at http://www.sccommerce.com/resources/pressreleasesannouncements.aspx?article=961.
Today, despite a slowing national economy, North Carolina, now the 10th-largest state,
has ranked fourth in the nation in job growth.
The state is consistently ranked among the top five places to do business in the U.S, demonstrating clearly the benefits of its reinvention as a high-tech, innovative location. Read more… http://www.tradeandindustrydev.com/issues/ID-349-article.aspx
Down the road… in Orangeburg County, SC, Jafza International is developing the 1,300 acre, Global Logistics Triangle here, including many millions of square feet of manufacturing and distribution facilities, all to capitalize on the growth of the Port of Charleston. Mine the details at … www.ocdc.com
Next, Bowden’s Market Barometer eyeballs the real estate Industry…the days of the McMansion are purportedly coming to a screeching halt. Crescent Communities recently compiled information from buyers and prospects in all of its Charlotte area luxury communities. The #1 trend they noted was “less square footage”. Therefore, design criteria have become a challenge. Buyer surveys by CarolinaLiving have reported demand for “small palaces” growing for two years. [To subscribe and review a sample of this indispensable resource, click to: www.bowdensmarketbarometer.com/]
NC is the fourth fastest-growing state says the U.S. Census Bureau…SC is ninth. 180,820 new NC residents from July 07-July 08 … 74,886 in SC. Private sector businesses, like banks and real estate, tend to focus on and set marketing budgets to insure getting their fair share of gross counts for in-migration. CarolinaLiving is forecasting gross in-migration (men, women, children) in 2009 at 150,000 SC, 320,000 into NC. Whether you consider this forecast high or low, this number does two things. It goes up by some amount (most) every year and continues going up for the next 25 years for the Carolinas. Why?
1. The traditional FL attraction is off and the Carolinas will absorb significantly from that.
2. The largest ever mobile and affluent, 74 million boomer cohort and an estimated (more than ever) 26% of these “lifestyle migrants” willing to relocate with many wanting out of the frost belt.
3. Private sector Carolina residential developers are spending $20+ million a year to advertise their destinations.
4. Tourism in both Carolinas remains a top industry with smart, aggressive public sector funded marketing.
5. SC ranks sixth in the nation for home value appreciation in 2008 says the U.S. Federal Housing Finance Agency.
6.
Second ranked MSA in the nation? The Augusta-Richmond County MSA, which covers parts of SC and Georgia, saw values increase 5.48% over the year.
7. NC named Top Business Climate for 4th consecutive year, says Site Selection Magazine.
Finally, according Bowden’s Market Barometer, a poll conducted by Opinion Research Corporation for AARP, showed one in four Baby Boomers (26%) expects to move from their current home in the future. Most said they will be looking for a better house, better climate, and/or a home that is closer to family and friends. 59% of those planning to move, are interested in a single-story dwelling and about half seek smaller digs…”small palaces”.
Demand for “green home design” is rising. In 2008, 23% of the most recent 5,000 families who “registered” with CarolinaLiving by completing our Carolina Lifestyle Survey™ and disclosing their housing preferences, checked off “Energy Efficient Green Home Design” as a major motivation. Up 29% from the previous 5,000 registrants!
Are you Going Green, too?
As part of the CarolinaLiving mission to perpetually promote green building and sustainable best practices to 1.2 million home buyers, we’re compiling directories of sustainable green-certified Carolina communities, builders, architects and green branded home components and visitor destinations.
Has your enterprise earned a spot on the directory?
www.carolinaliving.com/relocating/greenhometour.asp
Does your residential community offer a Discovery, Stay and Play package?
The April launch of our monthly B2C COMPASS ENEWS letter going to about 20,000 “registered” home buyers will include a directory of Carolina Discovery Packages. Send details of your offering to Debbie Holland and we will include you in the first edition with our compliments (Dholland@carolinaliving.com)
Congrats to The Cliffs at High Carolina, featuring Tiger Woods first American course … and the Echelon Team amazing $40 million in contracts at the fall launch!
Maggie Valley Club announced a successful launch of Masters Landing, its luxury townhome project.
Tradition Hilton Head, the 5,300-acre master-planned sustainable green community, has joined with the Beaufort-Jasper Water & Sewer Authority to provide the utility’s first water reuse service for residential irrigation.
Seawatch at Sunset Harbor has been selected by Coastal Living as the site for the magazine’s 2009 Idea House.
Balsam Mountain Preserve reporting good sales interest as well, says Bruce Fine, VP Sales and Marketing.
Entry level shelter priced under $175,000 across the Carolinas percolated well in January with about half generated from out of state buyers.
Share your good news for COMPASS readers! Send news and notes to Katherine Pettit at
KPettit@CarolinaLiving.com
Who are these families relocating amongst us? Where are they from?
Discover the top 20 origin MSAs for Carolina moves and some quick insight on their psychographics…
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